All across the country, entrepreneurs are making money in liquidations and returns. Not their own liquidations and returns, of course: These businessmen and women are buying up pallets full of products from massive but inefficient giants such as Amazon and Walmart. The neglected goods get new life as retail products in these smaller operations, which sell everything from like-new products and in-box returns to open-box products and B-stock items.
It can be great money. With such a cost-effective source of inventory, these businesses can afford to compete with the notoriously low prices offered by the companies that sold these pallets off on the cheap in the first place. But just because a liquidation business can be very profitable doesn’t mean that it will be. Here are some tips for getting things right.
Make a plan
Liquidation businesses are popular and, in many cases, successful. But they’re not foolproof, and they’re not things to consider lightly. If you’re going to start a business, then you need a real business plan. You need to do a lot of math, move some money around, and perhaps get a business loan. You need to consider the legal structure of your business, tax implications, and more. Protect yourself from the dangers of the small business world. You want to be able to enjoy the fruits of your ambition without risking too much in the event of failure.
Partner with the right suppliers
Your business is only as good as the products it sells. Great stuff can be had on the cheap from big box stores and massive ecommerce retailers such as Walmart and Amazon, but how can you know that you’re getting the good stuff? You can’t. You’ll have to rely on the intermediaries that Walmart and Amazon use to sell off their pallets of liquidations and returns products. Make sure that you work with trustworthy suppliers of liquidation goods.
Specialize and do your research
You can get all kinds of goods on liquidations and returns pallets. But with so many different products, how will you sell everything for a fair price? It will be nearly impossible: You’re sure to misprice something, resulting in a loss of profit or inventory that simply won’t sell.
You won’t be able to learn the fair market price of every product you could possible get in a liquidation auction. But you can become familiar with a market segment. That could mean electronics, for example, or perhaps something even more specific, such as electronics accessories (cases, carriers, peripherals, and so on).
With a focus in mind, you can snap up goods that suit your category and become familiar with resale prices, popularity, and trends within the business space. If you work hard and specialize, you’ll soon have much more knowledge to draw on as you seek to make your business more efficient and more profitable.
If you work hard and make decent profits, you may find yourself able to afford more inventory at once. That could expand your profits — as long as you stay effective and efficient. What’s not going to be good for your profits, though, is unsold inventory or expensive, ineffective employees.
Growing too fast can be deadly for businesses, but smart choices can give you sustainable growth and make you a huge success. So expand carefully: Make sure that you have the personal and financial bandwidth to invest in extra storage, employees, and other solutions.
You may find that enterprise software makes sense as your business grows. Digital voice solutions can help your business’ network stay connected and make it easier to reach partners and potential customers. Software solutions for call center QA can ensure that your customer service is on point. Your business may even change its focus over time — which is fine, as long as it remains profitable.